If a religious charity offers secular services, does it stop being religious in the eyes of the law?

By Kelsey Dallas

If a church-affiliated charity offers the same services as a secular charity, should it still be seen as religious?

A divided Wisconsin Supreme Court said no last week in a ruling that sparked intense debate about the future of faith-based tax breaks.

Judges in the majority said that a Catholic organization should no longer be granted a religious exemption by the state, since its efforts to serve the poor are not “primarily” religious.

“They offer services that would be the same regardless of the motivation of the provider, a strong indication that the sub-entities do not ‘operate primarily for religious purposes,’” Justice Ann Walsh Bradley wrote for the majority, according to The Associated Press.

The case is thought to be the first of its kind. Previous faith-related financial battles have generally centered on property taxes, while this one is focused on unemployment tax.

In property tax lawsuits, judges consider whether the land is not just owned by a religious organization, but also used by that organization for religious purposes, The Associated Press reported.

Similarly, in the Wisconsin case, judges weighed whether the Catholic charity’s work is motivated by religious teachings and whether its services are religious in nature.

“The record demonstrates that (Catholic Charities Bureau) and the sub-entities, which are organized as separate corporations apart from the church itself, neither attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees,” Bradley wrote.

If Thursday’s ruling stands, the bureau will have to begin paying into Wisconsin’s unemployment system. Currently, the organization uses an unemployment program run by the Catholic Church, per Catholic News Agency.

The Freedom From Religion Foundation is among those celebrating the ruling, since it believes that offering tax exemptions to religious charities like the Catholic Charities Bureau is a slippery slope.

“If the charity groups had prevailed, the next step would be arguments to exempt religious hospitals and colleges, such as Marquette University, from paying the unemployment tax,” a foundation representative told The Associated Press.

https://www.deseret.com/faith/2024/03/19/tax-breaks-for-church-charities/